Microsoft misses quarterly profit target, job cuts possible

When Microsoft posts its quarterly profit on Thursday, it is expected that it will have missed the company's own target for the quarter, prompting speculation that the company could soon announce thousands of job cuts.

Microsoft forecast a profit of 51 cents to 53 cents a share for the quarter, however analysts reckon that the actual profit for the quarter ending December 31 will be just 49 cents a share. According to estimates from Reuters, quarterly revenue is expected to be $17.1 billion, lower than Microsoft's target of $17.3 billion to $17.8 billion, as the company faces reduced demand in many of its key markets, such as new PCs, business software and video games.

Analysts expect Microsoft will announce job cuts to reduce costs, following in the steps of many other technology firms such as AMD, Sony and Sun Microsystems.

McAdams Wright Ragen analyst Sid Parakh said, "Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce. Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year."

Other analysts reckon that the cost reductions could occur over a longer period of time, with more targeted cutbacks instead of a large lay-off.

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